Commercial Clients and Worker's Comp

[Bryce C]

Generally, what percentage of commercial clients require you to have worker's compensation? We have commercial general liability and auto insurance, yet as an owner/operator I personally don't find value in spending thousands on worker's compensation right now regarding personal protection.

However we recently won a bid on carpet cleaning for a townhouse apartment community with 270 units, but they require their contractors to have worker's compensation. It is the first time this has come up with any commercial work we've gotten since starting this business about 18 months ago. Not sure where to go with it.

Actual worker's compensation insurance will cost us thousands annually. I looked into "ghost policies" which are legal for operations with no employees, but still cost over $1k annually. If this townhouse apartment community is the only work we have that would require it I don't feel that it is worth picking up the extra insurance for now, not until my business grows larger. However if a lot of larger commercial work will end up requiring it then it is worthwhile. Have you found that a lot of commercial customers require worker's comp? Have any of you owner/operators picked up ghost policies of workers comp?

 

[jeffexe]

All of my commercial apartment and senior communities require the ghost policy. I incorporated it into my pricing. It is kind of ludicris, but again, another expense for doing business. Wait until they decide to have a company do their payments. They require so many pages of crap and specific wording on policies. Then they deduct 3% from your invoice for administrative fees. Yes, You have to pay to get paid.

 

[BIG WOOD]

Generally, what percentage of commercial clients require you to have worker's compensation? We have commercial general liability and auto insurance, yet as an owner/operator I personally don't find value in spending thousands on worker's compensation right now regarding personal protection.

However we recently won a bid on carpet cleaning for a townhouse apartment community with 270 units, but they require their contractors to have worker's compensation. It is the first time this has come up with any commercial work we've gotten since starting this business about 18 months ago. Not sure where to go with it.

Actual worker's compensation insurance will cost us thousands annually. I looked into "ghost policies" which are legal for operations with no employees, but still cost over $1k annually. If this townhouse apartment community is the only work we have that would require it I don't feel that it is worth picking up the extra insurance for now, not until my business grows larger. However if a lot of larger commercial work will end up requiring it then it is worthwhile. Have you found that a lot of commercial customers require worker's comp? Have any of you owner/operators picked up ghost policies of workers comp?

Do you know a contracting company you can bill it under that you trust? I manage a local apartment complex here that has 3 complexes and I bill it under their company they use to refurbish the apartments after someone moves out.

Other than that, you could ask them if they need 5-7% to put you under their policy. They will take that percentage out of what you bill to pay for the insurance. I"ve done that also

 

[Bryce C]

Do you know a contracting company you can bill it under that you trust? I manage a local apartment complex here that has 3 complexes and I bill it under their company they use to refurbish the apartments after someone moves out.

Other than that, you could ask them if they need 5-7% to put you under their policy. They will take that percentage out of what you bill to pay for the insurance. I"ve done that also

I don't understand billing it under another contracting company, that seems odd. At that point would the property management company know that their invoices for carpet cleaning are coming from their non-carpet cleaning contractors? If their main concern is liability protection would that be a red flag for them?

Having the property management company deduct a percentage to throw us on their insurance makes sense. I suppose if we land more commercial work that requires workers comp than it would make sense to have our own policy, and if not then to have them add us to theirs if they're into it. At this stage with your business is it still only one property management company that requires the workers comp coverage or do you have more customers that require it?

 

[Dwain Ray]

It's my understanding you cannot get workers comp on yourself unless you are a corporation and hire yourself.

 

[Dwain Ray]

Generally, what percentage of commercial clients require you to have worker's compensation? We have commercial general liability and auto insurance, yet as an owner/operator I personally don't find value in spending thousands on worker's compensation right now regarding personal protection.

However we recently won a bid on carpet cleaning for a townhouse apartment community with 270 units, but they require their contractors to have worker's compensation. It is the first time this has come up with any commercial work we've gotten since starting this business about 18 months ago. Not sure where to go with it.

Actual worker's compensation insurance will cost us thousands annually. I looked into "ghost policies" which are legal for operations with no employees, but still cost over $1k annually. If this townhouse apartment community is the only work we have that would require it I don't feel that it is worth picking up the extra insurance for now, not until my business grows larger. However if a lot of larger commercial work will end up requiring it then it is worthwhile. Have you found that a lot of commercial customers require worker's comp? Have any of you owner/operators picked up ghost policies of workers comp?

Explain to them that you are an owner/operator with no employees

 

[Bryce C]

Explain to them that you are an owner/operator with no employees

They already know that. My wife and I sat down and went over everything in detail for an hour with the manager of the large property management organization. They require workers compensation anyway. As I was calling around getting quotes from insurance companies they didn't seem to have any issue with me being an owner/operator with no employees

 

[Dwain Ray]

Listening to that kinda corporate crap makes me glad i live and work in a rural area. My advice is walk away or Get the price for the insurance write a professional proposal total the amount for the work then add additional insurance requirements charge 120% of your cost and submit it to them. If they require it make um pay for it

 

[Dwain Ray]

my last run in with crap like that was about 15 years ago when while minding my own business cleaning a carpet the city came by and shut me down for not having an encroachment permit to run my hoses across the sidewalk. All pissed off i stormed down to city hall to see wtf! As it turns out they could care less about encroachment buried deep inthe paperwork was a clause that held the city "harmless " on my employee workers comp. Thats what they wanted so 3 days and 135.00 i was back in business , almost the encroachment permit issued stated window cleaning equipment. Pissed off i stormed back to city hall and demanded that they change it to say carpet cleaning equipment! They did with a ink pen. I left city hall with encroachment permit for carpet cleaning equipment in hand. Drove around the corner and the cheif of police was standing outside my favorite coffee shop chatting with someone. The parking spot right in front was not big enough for me to park my van parallel to the curb so i ramed th passengers side wheel up on the curb till the drivers side hit. The cheif of police jumped back reaching for his gun yelling wtf you think you're doing!!! At this point all the customers in the coffee shop are pressed up against the windows watching whats going on. I said to the police cheif " just a second", i poped outa my van and handed him the paper i had received from the city a few minutes earlier and i informed him that i have an encroachment permit and walked away to get my coffee.when i came out he folded the paperwork ,handed it back to me and with a smile said thats good n all, but you still can't park that way. That alone was worth the 135 bucks i spent but it didn't end there 6 months later city hall called for a carpet cleaning estimate i wrote the estimate with a price then added a charge for licensing and permits for an extra 175.00. They questioned and bocked over the charge. But as it turned out i was the only bid and thats how i got back my "pound of flesh " when all else fails i use there rules against them!